Download Empresa de Telecomunicaciones de Bogotá September 2014

Empresa de
Telecomunicaciones de Bogotá
September 2014
Disclosure
This presentation contains future forecasts of the company's probable business development
and estimated results. The forecasts include information related to current company
estimates, approximations or expectations pertaining to its financial future and operational
results. It should be noted that this information is no guarantee of performance and may be
modified at a later date. Real results may fluctuate in relation to future company forecasts due
to various factors that are beyond the issuer's control. The Company assumes no responsibility
for the information contained herein, nor the obligation to review the forecasts established in
this document or the duty to update, modify, or complement it on the basis of events occurring
after its publication. The information disclosed through this document is of an informative and
illustrative nature and may not be given to third parties, or reproduced, copied, distributed,
used or sold without prior written authorization from the Company.
02
Participating
executives
ETB CEO
Vice-president Finance
and Administration
Saúl Kattan Cohen
Hernando Chica
Zuccardi
03
Organizational Chart
ETB S.A. E.S.P.
Board Of Directors
CEO
Saúl Kattan Cohen
Secretary General
Javier Gutiérrez Afanador
Communications and Brand
Management
Claudia Liliana López G.
Vp. Homes
and Personal
Services
Carlos A.
Gómez
Vp. Business and
Government
Guillermo Iván
Ocampo
Sequeda
Vp. Commercial
Customer
Experience
Carlos Eduardo
Graham Sardi
Vp.
Infrastructure
(Deputy)
Efrain Ramírez
Corporate Audit
Mauricio Vasco Moscovith
Investor Relation Director
(Deputy)
María Bruny Fajardo
CFO
Hernando
Francisco Chica Z.
Vp. Strategy
And Business
Pablo Antonio
Gómez Mora
Vp.
Mobilities
(Deputy)
Isabel Cristina
Martínez
Vp. IT
Juan Manuel
Cortina Navarro
04
Content
1. STABILITY
2. FINANCIAL STATEMENT
3. SOCIAL RESPONSIBILITY
05
More than
130 years of operation
Purchase of75% of
Commencement
Skynet.Satellite
of the
services company.
deployment of
2014
FTTH in Bogota
ETB was founded in 1884 as a state-owned
telephone company and remained as
such until the ‘90s, when market reforms
liberalized the market.
In 2000 and 2003, we sold shares in the
Colombian Stock Exchange, becoming a
publicly traded company, which allowed us
to expand our shareholders base. Public
shareholders today own 11.6% of the
company’s stock.
In 2003 we partnered with EPM to form
Colombia Movil, currently the third largest
mobile operator, and in 2005, we entered
into a strategic alliance with DirecTV to
offer bundled services (Triple Play).
In 2012 we decided to develop our Pay-TV
business by acquiring Ingelcom, a regional
television provider.
Change of name to
Empresa de
Telecomunicaciones de
Bogota and enters to
the value-added
services market
Entry to the long
distance services
market
1998
1997
1992
1884
1990
1940
2005
2000 &
2003
It entered to the
securities market
(joint-stock
company)3
It entered to the
Colombian stock
market, allowing
private shareholders
to be the owners of
11.6% of the
company.
2013
2012
2008
2003
In 1990, some market reforms were
made, allowing ETB to enter into
several market segments.
Founded as a stateowned company,
Compañia
Colombiana de
Telefonos
Entry to the carrier
services market and we
begin to provide DSL
Internet services
Consolidated as market
leaders of broadband
Internet in Bogota
Association to a
risk shared with
EPM in order to
form Colombia
Movil S.A.1
Entry to the
mobile market as
virtual operator
Award of the LTE License
and commencement of
the deployment of Fiber
to the Home
Acquisition of
Ingelcom,regional
company provider of
paid television.
Strategic alliance
with DirecTV in order
to provide television
services.(Triple Play)
Change of name to La
Empresa de Telefonos
de Bogota,
06
General Overview of ETB
Relevant Information
Established in 1884 as the first telecommunications provider
in Colombia.
Largest telecommunications operator in Bogotá, Colombia's
largest city with 7.5 million inhabitants (8 million including
Soacha):
61% market share in fixed lines.
36% market share in broadband.
The leading operator of fixed lines in Colombia, with a wide
range of telecommunications services, including broadband
Internet, IT services and mobile services
Approximately 1.5 million fixed lines and 552 thousand
Internet subscribers.
2,847+ direct employees.
Market Capitalization: USD 824.8 million.
Majority Shareholder: Bogotá District (86.58% of shares).
Financial Data:
Annual Sales: USD 728.7 m
Annual Adjusted EBITDA: USD 329.2 m (margin of 45%)
Basic Line Market Share in Colombia
Other
9%
EPM (UNE)
27,7%
ETB
21,4%
CLARO
16,6%
Telefonica
25.3%
07
Shareholding
Composition
Bogotá D.C.
86.58%%
Ordinary Shareholders
88,40%
Ordinary
Shareholders
88.40%
U. Distrital
1,77%
Driver of liquidity
0.27%
Common Shares
11,60%
EAAB, FAVID, IDU
0.0002%
Total common shares 3,138,543,711
Total Floating common shares 412,236,186
Total shares in the market 3,550,553,412
Other Shareholder
10.13%
Local Funds
1,20%
08
Stock
Price
09
ETB S.A. ESP.
and its Related Companies
ETB S.A. ESP
88.2%
ETB S.A. ESP
39.99%
Colvatel
S.A. ESP
Contact Center
Américas
ETB S.A. ESP
75%
Skynet de Colombia
S.A. E.S.P.
10
Evolution of the Telecommunications
Sector - Colombia
No. of subscribers of other services
(Millions)
9
60
8
50
7
6
40
5
30
4
20
3
2
10
1
No. of mobile phone subscribers (Millions)
TOTAL SUBSCRIBERS PER SERVICE
-
-
Mobile Telephony
Basic Line
Dedicated Internet
Mobile Internet
CAGR – PER
ANNUM
4Q12 - 4Q13
QUARTERLY
VARIATION
3Q13- 4Q13
2.5%
3.4%
13.5%
5.7%
15.4%
2.0%
42.2%
13.0%
8.3%
1.7%
The Mobile Internet service
exceeds Land-Based Internet
for the first time in number of
subscribers, consolidating in the
year 2013, as the service with the
highest growth rate (CAGR) 42%,
followed by Dedicated Internet
with a rate of 15.4% (CAGR)
TV
11
Basic Line
Bogota - Soacha
ETB remained the market leader in the year 2013 with a share of 60.8%.
Basic Line
Subscribers
(Thousands)
7.5%
23.2%
183
1.473
8.4%
204
562
60.8%
4Q-13
CLARO
Basic Line
Share
(%)
MOVISTAR
ETB
UNE
4Q-2013
* For 2013 the MinTIC again published the lines in service, as opposed to 2012 when the lines billed were published.
Note: The report of the DANE is used to calculate household penetration.
12
Dedicated Internet
Bogota - Soacha
ETB holds a share of 35.7% in this market.
Dedicated internet
Share (%)
4Q-2013
Dedicated internet
Subscribers
(Thousands)
1.392
19
1,4%
9,9%
618
120
44,4%
35,7%
498
138
4Q-13
CLARO
MOVISTAR
8,6%
ETB
UNE
4Q-13
Note: The report of the DANE is used to calculate household penetration.
Source: Prepared by GEC according to information published by the MinTIC in the 1Q of 2014.
13
Strategic
Programs
N-PLAY SERVICES
MOBILE SERVICES
POTENTIATION
OF REGIONAL
BRANCHES
WIFI
EXCELLENCE IN
SERVICE
STRATEGIC
CUSTOMER
MANAGEMENT
- Release of the commercial offer of high-speed internet, voice and interactive TV.
- Recognition of FTTH Council as the “Best deployment of Latin America in 2013” and of
Evaluamos as the “Best innovation in Telecommunications in 2013.”
- Completion of the implementation of the network and computing platforms and core of the 4G
network, as well as integrations with the infrastructure of Colombia Movil (strategic partner for
infrastructure sharing) and other operators.
- Selection of all channels to support the sale and service processes of the mobile business.
- Negotiation with infrastructure suppliers for deployment in cities.
- Building of Rings in Bucaramanga, Medellin, Cartagena, Barranquilla and Tunja.
- Completion of network designs access and definition of the brand business
offer for the WiFi product.
- Integration process of 40 Public phones with WiFi hotspots with operating management
platforms provided in partnership with the possibility of continuing to use them.
- Implementation of the Customer Service protocol in different contact channels with customers
and operation of the Contact Center agreement.
- Consolidation of the financial operation and information of UENs and customer dial-up by UEN
and Siebel segment.
14
Relevant Facts
for Transformation
1Q13
Placement of
external public
debt bonds for 300
million dollars. The
demand exceeded
eight (8) times the
amount offered
2Q13
Awarding of LTE
spectrum with the
partnership ETB –
Tigo, on the open
block AWS band
for an amount of
$195,000 million
Commencement
of the deployment
of FTTH (N-Play
Program)
3Q13
Implementation of
Wi-Fi solution on
public phones (forty
hotspots)
4Q13
Accenture Award
to Innovation in
Colombia 2013,
public winner in the
Corporate Social
Responsibility
category.
Stock sale
agreement
(24.99%) of
Colombia Movil to
Une-EPM for 240
million dollars
Merger with the
Ingelcom company
1Q14
Acquisition of 75%
of Skynet
Winner of the
Evaluamos a
la Innovacion
Tecnologica Award
with ETB’s Fiber
Optics To The Home
program – FTTH
2Q14
Deployment of Fiber
Optics to more than
450,000 homes in
Bogota (homes
passed)
First test call of
our 4G LTE mobile
operation
Conclusion and
delivery of Rings in
Medellin, B/manga
and Tunja in order
to potentialize our
regionals
Creation of the post Vice
Chairman of Customer
Experience
15
Portfolio - ETB
Households and Persons
Fixed Telephony
Local Telephony
and PBX service in
unrestricted calls and
Cuenta Control plans.
Internet
Internet access
service through
fiber optics GPON
household network
or copper DSL
technology, with fixed
or dynamic IP and
speeds from 1.1M to
30M.
NEW 2014
Television
IPTV
IPTV service through
fiber optics GPON
household network
and analog TV through
HFC networks. Over
150 SD and HD
channels, 30 music
channels and 18
radio stations. With
services of mini guide,
playback up to one
hour and recording
of up to 5 hours
simultaneously.
NEW 2014
4G LTE mobile
Postpaid Mobile
Internet service in
Cuenta Control. 3.5G
Technology.
16
IR Acknowledgement
Investor Relations - BVC
- Adoption of best practices in terms of
information disclosure and relationships
with our investors, issued by the Colombia
Stock Exchange.
- Exalts the transparency in
the information provided.
17
Current
Certifications
Quality Management ISO 9001,
Bureau Veritas
Compliance with customer requirements
and continuous improvement of
processes and human resources.
Increase in positive image before
Customers, Suppliers, and compliance
with the legal framework.
Quality Management ISO 9001,
Bureau Veritas
Compliance with customer requirements
and continuous improvement of
processes and human resources.
Increase in positive image before
Customers, Suppliers, and compliance
with the legal framework.
Public Management NTCGP 1000:2009,
Bureau Veritas.
Improvement, performance and ability
to provide products and services that the
citizens need.
Communication, citizen participation,
transparency and cooperation with state
entities. Efficient risk management to
monitor processes.
Public Management NTCGP 1000:2009,
Bureau Veritas.
Improvement, performance and ability
to provide products and services that the
citizens need.
Communication, citizen participation,
transparency and cooperation with state
entities. Efficient risk management to
monitor processes.
18
Content
1. STABILITY
2. FINANCIAL STATEMENT
3. SOCIAL RESPONSIBILITY
19
Financial
Evolution
Given its low level of indebtedness, ETB has
important contribution margins with respect to its
financial obligations.
The generation of cash flows, the debt profile and
the conservative financial management policy of
the company have allowed to permanently hold a
domestic corporate debt rating of triple AAA since
2003 and obtain from international rating agencies:
Fitch, foreign and local currency
BBB- Stable Prospects (March 2014)
Local currency Ba1 Stable Prospects
(July 2014).
20
June 2014
Assets
December 2013
March 2014
COP 1,764,441.22
USD 915.72
COP 1,618,046.99
USD 823.30
COP 1,602,865.18
USD 823.30
(COP billions)
December 2013
March 2014
June 2014
Liabilities
COP 3,097,741.16
USD 1,607.69
COP 3,073,564.36
USD 1,563.90
COP 3,102,521.72
USD 1,649.23
COP 4,862,182.38
USD 2,523.41
COP 4,691,611.35
USD 2,387.20
COP 4,705,386.90
USD 2,387.20
Balance Sheet
Financial Statements
March 2014
June 2014
December 2013
Equity
21
1,414,401
2013
17,587
1.3
Absolute
(19)
-2.5
2Q
2013
3Q
2013
1Q
2014
USD 182,43
USD 190,22
4Q
2013
96%
COP 331.289
757
COP 355.631
-2.5
COP 355.631
(19)
Comp.
2013
COP 355.510
748
Comp.
96%
Budget
%
USD 190,22
729
Absolute
USD 181,97
2012
96%
757
Variation
2013
COP 355.510
As of December
Budget
1,414,401
2013
%
USD 182,43
748
%
Comp.
USD 182,43
729
96%
Budget
COP 331.289
1,344,272
2012
1Q
2013
1.3
USD 182,43
1,361,859
2013
Comp.
2013
Variation
COP 340.084
Total
non-operational
income
Absolute
USD 181,97
USD Million
2012
As of December
USD 180,78
Income
17,587
COP 340.084
Total
non-operational
income
2013
Budget
%
Variation
COP 337.860
non-operational
USD Million
income
1,344,272
USD 180,78
Total Income
1,361,859
Absolute
As of December
COP 337.860
COP Million
Variation
2012
USD 175,72
Income
COP 328.406
(COP billions)
Total
non-operational
income
2013
USD 175,72
Income
As of December
COP Million
COP 328.406
Financial Statements
Income
2Q
2014
22
Financial Statements
Ebitda
(COP billions)
cember
As of December
13
rational profits
ortizations
reciations
2014
284.754
As of June
As of June
2013
2014
284.754
294.563
32.610
21.636
149.078
146.863
63.282
55.307
49.591
60.947
21.636
146.863
55.307
60.947
Operational profits
Amortizations
Depreciations
Provisions
EBITDA
23
Financial Statements
Dividends
(COP billions)
Dividends Billions
ETB has distributed significant amounts of cash in
dividends.
Since 1999, COP 1,802 billion has been transferred.
Declared
Paid
Declared Dividends
District
Privileged
Paid Dividends
Solidarity
District
Privileged
Solidarity
24
Financial Statements
Generation of Stable Cash Flow...
(COP billions)
Stable Income...
...Adjusted EBITDA
Basic Line
National and International Long-distance
Value Added Services
Yellow Pages
Access Charges
Equipment Sales
Movil
$ 798
4%
13%
32%
$ 815
3%
3%
9%
34%
1%
3%
$ 798
3%
8%
37%
50%
51%
$ 398
$ 416
53%
47%
$ 420
45%
$ 352
1%
3%
43%
$ 329
$ 150
$ 747
2%
8%
2%
3%
$ 729
0%
8%
1%
2%
3%
$ 404
0%
7%
40%
0%
2%
2%
2009
2010
Adjusted EBITDA
2011
2012
2013
June 2014
Adjusted EBITDA Margin
Solid Capital Investment
43%
$ 184
$ 318
47%
$ 129
$ 107
49%
50%
47%
44%
$ 122
$ 105
41%
46%
0
2009
2010
2011
2012
2013
June 2014
2009
2010
2011
2012
2013
June 2014
25
Financial Statements
...Combined with Low Leverage
(COP billions)
Conservative Capitalization Coverage Indicators: Net Debt
and Interest at Dec 2013 (USD million)
Coverage Indicators: Net Debt and Interest
31,4 x
26,8 x
Pensiones
CXC 12%
12.8x
18,1 x
0,1x
Deuda Total 11 %
Caja 21 %
22,1 x
0%
Otros Pasivos
Pensiones
0%
0,2x
25 %
PP&E
(0,2x)
2009
2010
Net Debt/ Adjusted EBITDA
2011
(0,5x)
2012
35 %
(0,8x)
2013
Patrimonio
64 %
31 %
Adjusted EBITDA/ Interest Charges
Assets
Financial Leverage Index
Liabilities
Cash on Hand and Debt Repayment Schedule
(US$mm)
11,0 %
3,3 %
10,3 %
10,4 %
14.6 %
14.6 %
$389
9,2 %
$283,7
3,9 %
(5,5)%
(10.7)%
2009
2010
Total Debt/ Capitalization
21
2011
2012
Total Debt/ Capitalization
(6.0)%
$0.2 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0
(13.9)%
2013
June 2014
June 2014
2014
2015
2016
Cash
2017
2018
2019
2020
2021
Total Debt
2022
2023
26
Results
June 2014
USD
USD
USD $ million
Income
USD
352.04
351,84
345.00
June 2013
USD
2013
2014
VARIATION VARIATION
2013
2014
-10%
159.72
LOCAL
-10%
USDLOCAL
159.72 USD
USD
143.82 USD 143.82
USD
LD USD
-2%
27.81
USD
143.82
LD USD 27.81
USD
27.28 USD 27.28-2%
USD
90.44
DATA USD
13%
40.70
90.44
DATA USD 40.70
USD
45.92 USD 45.9213%
USD 44.38
USD 44.38INTERNET
INTERNET
3%
USD
87.43
USD 90.44 3%
87.43
USD
90.44
June
2013 44.38
June 2014 VARIATION
VARIATION
2013 USD
SP. 36.38
BUS..2014USD
22%
36.38
SP. BUS..
22%
USD
USD
44.38 USD
LOCAL
-10%
USD
159.72
USD
143.82
LOCAL
-10%
USD
143.82
USD
159.72
USD
-0,1%
352.04
USD 351.84
-0,1%
LD TOTAL
USD TOTAL
352.04
USD
351.84
USDUSD
27.81
USD USD
27.28
143.82
LD
-2%
USD
27.81 -2%
USD
27.28
USD
143.82
USD
USD
45.92
USD
USD 45.92
DATA USD 40.70
USD
45.92USD 40.70 13%
90.44
DATA
13%
USD 45.92
27.28
27.28
INTERNET
3%
USD 87.43
USD 90.44USD 87.43
INTERNET
3%
USD 90.44
SP. BUS..
USD 36.38
USD
44.38USD 36.38 22%
SP. BUS..
22%
USD 44.38
USD
345.00
354.00
USD
90.44
June
2013USD June 2014
June
2014
345.00
June 2013
USD 44.38
Business Lines
USD
143.82
USD
USD
USD 44.38
354.00
354.00
USD
27.28
USD 45.92
June 2014
June 2013
June 2014
TOTAL
USD 45.92
USD
351.84
TOTAL
USD 352.04-0,1%USD 351.84
USD 352.04
USD
27.28
-0,1%
Profits
US D 40,00
US D 40,00
USD
26.36
US D 30,00
US D 30,00
US D 20,00
US D 40,00
US D 10,00
US D 30,00
USD
26.36
USD
US D 20,00
US
D 40,00
32.40
US D 10,00
US D 30,00
US D 10,00
USD USD
14.17 USD
34.22
USD
14.17
34.22
172.00
172.00
USD
USD
161.00
161.00
26.36
2013
US D 10,00
Operational
Profits
2013
USD
USD
USD
32.40
USD
US D 0,00
14.17
US D 20,00
Profits
June 2013
JuneOperational
2014
June 2013
US D 0,00
Operational Profits
Ebitda
26.36
USD
USD
14.17
Net Profits
June 2014
2014
USD
172.00
USD
161.00
June 2013
USD
172.00
161.00
June
2013
June 2014
June
2014
Net Profits
2013
US D 0,00
34.22
34.22
32.40
USD
US D 20,00US D 0,00
USD
USD
USD
USD
32.40
USD
2014
Net Profits
Operational
Profits
2014
2013
Net Profits
2014
June 2013
June 2014
June 2013
June 2014
27
Results
June 2014
(COP billions)
Local
Special Business Ventures
2013 $300.455
2013 $68.446
2014 $270.560
2014 $83.486
Variación -10%
Variación 22%
Internet
2013 $164.469
2014 $170.126
Variación 3%
LD
2013 $52.308
Data
2014 $52.311
Variación -2%
2013 $76.572
2014 $86.391
Variación 13%
Total
2013
2014
Variación
$666.266
$666.920
0,1%
28
National Optical
Transmission Network,
Internet Outlet and
Metro Ethernet Networks
National Transmission Network
Trunk capacity installed: 435 Gbps.
ETB Fiber optics: 3,953 km. Optic fiber
in IRU: 3,930 km.
Santa Marta
Barranquilla
Cartagena
Tulu
Fundacion
Monteria
Cucuta
Bucaramanga
Internet Outlet (International Channel)
4 IP Nodes IP of Internet Outlet, two of
them located in the city of Bogota, one
in Barranquilla and another in Cucuta.
Medellin
Tunja
Manizales
Pereira
Armenia
Ibague
Cali
Popayan
Neiva
Sogamoso
Yopal
Bogota
Puerto Lopez
Villavicencio
Granada
Metro Ethernet
Present in more than 20 cities of the
country which has 89 equipments at
a national level an 1,129 equipments
distributed in Bogota. Providers Huawei
and Cisco.
29
Evolution of
Backbone Networks
Coverage
Increasing
demands for BW
by services
Expansion 300 at
450 Gbps in 2013
IP/MPLS network
Convergence of
Services
IPTV configuration
on the Carrier
Ethernet network
Quality of Service
Full redundancy
star topologies
in Backbone
network.
4 international
output nodes.
Current and
Future Services
Cost / Benefit
Ratio
Service for:
- Mass: Broadband,
voice, TV.
- Corporate: Data,
Internet, voice.
The cost per Mbps
has decreased
45% in the last 5
years.
30
Location of
FTTH Nodes
31
Content
1. STABILITY
2. FINANCIAL STATEMENT
3. SOCIAL RESPONSIBILITY
32
Corporate Responsibility
Program
Transparency Program
Amendment to the bylaws of the company, new Governance code and formation of the Ethics
Committee. Release of the Transparency and Zero Tolerance to Corruption Policy.
Contractor
Development Program
Inclusion of the Agreement on Best Corporate Responsibility Practices in the Procurement
Manual. Development of the First Steps in Corporate Responsibility Program together with
Universidad Externado de Colombia and Red Pacto Global in Colombia.
Supplier Standardization Process .
Human and Gender
Equity ProRights program
Release of the Human Rights Policy. Conduction of a Diploma Course on Human Rights and
Business. Awareness-raising campaigns on women’s rights and children’s rights .
Program for Massive
Use of ICT and
Communication
Technologies
Award Accenture to Innovation, in the category of Corporate Social Responsibility.
25 Vive Digital (PVD) hotspots were Implemented in agreement with the Ministry of Information
and Communication Technologies . 105,836 persons trained in the use of ICT.
33
Program for Massive Use
of ICT
Types of Interactive Portals
ETB Portals
Mass access points
that offer contents
concerning ICT in
order to reduce the
digital gap.
SENA Portals
Portals located in
spaces provided by
SENA, which offer
supplementary
training courses.
Citizen Service
Portals
Portals located
in the CADE
network, provide
the possibility of
virtually accessing
Online Government
processes.
Applications
Development
Center
Located in
Universidad Distrital
Technological
Offices, which is
aimed at students
for the creation
and development
of innovative
applications with
an impact over
the community of
Ciudad Bolivar.
Tourist Information
Point (PIT)
Portals specialized
in providing advice
in tourism related
issues in Bogota.
Interactive Bus
Mobile interactive
portal, equipped
with state-of-theart infrastructure
that covers the city,
offering training
and short-duration
awareness-raising
campaigns. .
34
Thank you,
[email protected]
www.etb.com.co/inversionistas
+ (571) 242 3029
01 8000 120077
35